Crop insurance premiums fell 31% in the first half of FY27, while fire insurance premiums declined 26.6%, as lower premium rates and aggressive discounting weighed on the non-life insurance sector.
The decline in crop insurance premiums was driven by a high base in the previous year and lower premium rates, rather than a reduction in coverage. Under the Pradhan Mantri Fasal Bima Yojana (PMFBY), 241 lakh farmers were insured across 278 lakh hectares during the 2026 kharif season as of August 27, higher than the corresponding year-earlier level, according to a report by CareEdge Ratings.
The contraction was particularly sharp among specialised public sector insurers, whose crop insurance premiums fell 59% in the first half of FY27. General insurers recorded a smaller decline of 3.9%. As a result, general insurers’ share of crop premiums increased to 70.9% from 50.9% in the first half of FY26.
Fire insurance premiums fell 26.6% during the first half, given sustained price competition and heavy discounting in the segment. The decline was broad-based, with public sector insurers reporting a 26.8% fall, compared with a 26.5% contraction for the rest of the industry.
However, the pace of decline in fire premiums moderated to 13.6% in September from 24.8% in August and 30.9% in July. However, the discounting could be easing, with catastrophe-related claims potentially influencing pricing at upcoming renewals.
The weakness in crop and fire insurance weighed on overall industry growth. Non-life insurance premiums grew 6.1% year-on-year to Rs 32,951 crore in September, compared with 10% growth in August. Crop and fire insurance together reduced premiums by Rs 2,103 crore compared with September 2025.
The underlying performance of the sector remained stronger when these two segments were excluded. Premium growth across the rest of the industry accelerated to 17.7% in September from 14.3% in August.
Health insurance premiums rose 20.2% year-on-year to Rs 12,847 crore, while motor insurance premiums increased 12.9% to Rs 9,256 crore. Retail health insurance continued to be a key growth driver, with premiums rising 32.8% to Rs 5,737 crore.
For the first half of FY27, the non-life insurance industry recorded premium growth of 8.9% to Rs 1.80 lakh crore, compared with Rs 1.65 lakh crore in the year-earlier period.